Gold prices extended losses from the previous session in early Thursday trading, failing to reflect the supportive fundamentals currently in play. Expectations surrounding the Federal Reserve remain dovish, with markets pricing in at least two 25bp rate cuts in 2026, a dynamic that creates headwinds for the US dollar. At the same time, geopolitical tensions remain elevated, with flashpoints in Ukraine, the Middle East, and growing uncertainty surrounding the United States’ apparent decoupling from the status quo that has underpinned stability in the West since the Second World War. Against this backdrop, gold prices would typically be expected to rise, supported by increased safe-haven demand and by bullion’s inverse correlation with the dollar. However, so far this year gold bulls have remained on the sidelines, awaiting the release of US labour market data on Friday, including the closely watched Non-Farm Payrolls report. The December figures will provide an important snapshot of the health of the US labour market and could shape expectations for the Federal Reserve’s monetary policy path and impact gold prices.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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